the realities of data and marketing: success, … · the realities of data and marketing 10 still,...

Spring 2018 research survey for the Ascendant Network, sponsored by Verve

THE REALITIES OF DATA AND MARKETING: SUCCESS, CHALLENGES, AND THE STATE OF PERSONALIZATION

“Without big data analytics, companies are blind and deaf, wandering out onto the Web like deer on a freeway.”Geoffrey Moore, Author of Crossing the Chasm & Inside the Tornado

2The Realities of Data and Marketing

OVERVIEWData-driven marketing. Marketing analytics. GDPR. Privacy. Identity, DMP, CRM. These are the new terms, techniques and technologies that modern marketers have to learn about and put to work in order to stay in the race with consumer. Without question, our survey of the Ascendant Network shows that forward leaning marketers agree: data is the key to success in their efforts, and data is how they will remain competitive.

But challenges loom. Since initiating this research, Facebook has disclosed inappropriate access to profiles by firms with which they worked, calling into question what data can be released to their customers for better targeting and attribution. Regulation of data is a common topic of discussion, and data breaches like those at Equifax and Target remain fresh in people’s minds. To realize the data-rich future that marketers envision, they’ll have to build, embrace, and carefully implement the technology that holds such promise — but also give full commitment to protecting their customers in the process.

This report captures the excitement and the mandate to make data part of the marketer’s core skill set in pro-consumer, privacy-positive ways. We look at what’s happening now, at the ways in which companies are seeing success, and how marketers are addressing the challenges that emerge along the way.

My organization has:

Over 10,000 5,000-10,000 Less Than 5,000 Employees (48%) Employees (10%) Employees (41%)

My marketing focus is:

Consumers Businesses(76%) (24%)

My role is:

Marketing Leadership Marketing Execution Other Leadership* (CMO, SVP, VP) (69%) (Dir) (21%) (10%)

Which department owns the customer database?

Marketing Dedicated data/ CRM/Customer IT Other (31%) analytics team (21%) Engagement Team (21%) (10%) (17%)

METHODOLOGYIn March 2018, we surveyed the members of the Ascendant Network to understand their perspective on the purchase, management, and use of customer data (SEE FIGURE 1). We also interviewed five leading marketing executives from the Ascendant Network to get a deeper understanding of their use of data, of what successes and challenges data has brought to the table for them, and of how they think data’s role will evolve in the future.

I am involved in the following:

Digital Print TV OOH Other (all channels)

90%+

55% 52%41%

17%


FIGURE 1

Profile of Survey Respondents


EXECUTIVE SUMMARY

From our survey and research, senior marketing executives tell us that:• Data isn’t a passing fad. Universally, respondents are believers in data. And the results justify that

confidence, with expectations of success proving true: half of the respondents saw a data-driven lift in metrics of over 10%, with nearly 20% seeing a lift greater than 25%.

• The decision to buy data comes from marketing — they’re the business owner of these initiatives — but, in order to put the data to work in terms of analytics and insights, collaboration with IT and Business Intelligence teams is mandatory.

• While use cases and activations vary, marketers agree that there is long road to travel before they can say they have mastered the use of data in their marketing efforts.

“Data is the new oil. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value.”Clive Humby, UK Mathematician and architect of Tesco’s Clubcard, 2006


MARKETERS ARE UNEQUIVOCAL: CUSTOMER DATA IS MISSION CRITICALData has become a pillar of marketing. It’s at the core of the discipline now. Over the past five years, and more aggressively in the past two years, marketers have discovered the power of using customer data to drive marketing success — and they are not looking back.

With nearly unanimous confidence, all of the marketers responding to our survey associate the word “critical” with “data.” They believe data is not only critically important to marketing success in 2018 and beyond, they also believe that the effective use of customer data is critical to competitive success versus other things that help them stand out as a company.

When asked about what drives the marketing decision-making process, 88% of respondents said data is taking a leading role. 56% believe creative and data will work together, but within that mix a solid one-third of respondents are putting data in the driver’s seat.

This is not a decades-old trend; it is a new development that is shifting the way marketing works. Even companies we spoke with that have long been analyzing data have only recently shifted to data-led thinking in marketing. Two-thirds of respondents agree that this shift from creative-led to data-led is a new approach only in the last three years, in some cases even more recently. That is a dramatic change from the marketing environment most experienced marketers have known for most of their careers, but it is a natural dynamic for the new crop of marketers joining the ranks.

96%…believe effective use of customer data drives a competitive advantage over companies that haven’t sharpened their data skills

of respondents…

…believe customer data is important or critically important to marketing in 2018 and beyond


Customer data that companies are confident will support their marketing efforts are already largely in place (SEE FIGURE 2). Data from broad sources like mobile, CRM, and other company-controlled data like web traffic, are already being activated and driving results. Furthermore, resources for customer data like transaction, loyalty, and shopping cart histories are driving results for a large portion of our survey set. Emerging sources of data, like the output from voice and AR interfaces, location tracking, and even the use of third-party data remains in the testing phases for over half of the marketers responding. In general, when it comes to types of data, the marketers we surveyed are still dependent on data they can trust from internal sources — they are still testing the waters on external data.

FIGURE 2

Describe your organization’s maturity when it comes to using the following customer data sources:

13.6% 22.7% 22.7% 40.9%

27.3% 36.4% 36.4%

27.3% 18.2% 18.2% 36.4%

13.6% 22.7% 36.4% 27.3%

4.5% 36.4% 31.8% 27.3%

27.3% 27.3% 22.7% 22.7%

INTERNAL DATA Not Using Testing Fully Activated Active and Driving Results

Transaction data

First-party data (internal)

Shopping cart data

Mobile

CRM

Loyalty

27.3% 27.3% 22.7% 22.7%

22.7% 31.8% 18.2% 27.3%

Not Using Testing Fully Activated Active and Driving ResultsEXTERNAL DATA

Publishers

Third-party data (external)

22.7% 45.5% 13.6% 18.2%

59.1% 40.9%

66.7% 33.3%

Not Using Testing Fully Activated Active and Driving ResultsEMERGING DATA POINTS

Location

Emerging: voice

Emerging: AR


Marketers Want More Data, but Organization and Practical Roadblocks Get in the WayIn many of these interviews, the media team was the organization that had the most direct access to data, especially among manufacturing brands that do not have a direct relationship with their customer base, or where performance marketing owns a large budget. When speaking directly with marketers, it’s clear that a majority must still “sell-in” the need for this data to be accessible and usable by their marketing teams.

Challenges Marketers Face Regarding Access to Data:

Historical control Tech or IT controls the platforms, and therefore controls the data

Corporate challenges Mergers, divisional silos

Technology decisions Access to data may be limited by legacy technology infrastructure

Legal issues Privacy policies, legislative compliance, security concerns

Skill shortages Data scientists and marketing activation people don’t have the bandwidth to “play” with the data.

Top down has been the approach to data strategy — new CEO, the board, the US leadership. They have been

driving the desire to be a data-led organization. That has been huge for hiring the right people, building presentation layers for decision-making, and putting budget behind the priority.

Head of Digital Activation, Sports Apparel Manufacturer


The Three Metrics of Success: Sales, Customer Growth, and ROI Marketing’s excitement about the use of customer data is not confined to buzzwords and “future-of” articles in the trades. When asked about buzz versus reality, only 22% of the respondents said “customer data” remains just a buzzword term within their organization. Conversely, 82% of respondents said data is driving real, sustainable results for marketers and their businesses. For the majority in our survey, the application of data to marketing is driving planning, metrics, and sales. When asked to rank their top-three outcomes, respondents told us that conversion, sales and ROI led by a mile (SEE FIGURE 3).

Higher conversions

Optimized marketing spend/ROI

Higher sales

Increase in brand awareness

Increase in average shopping cart

Other

81.8%

18.2%

77.3%

63.6%

4.5%

FIGURE 3

What business outcomes are you expecting (choose your top 3)?

36.4%


Additionally, marketers have set a plan for their spending on customer data and those plans seem to be yielding strong results. Half are generating greater than 10% lift in their business metrics, and nearly one-fifth are driving increases above 25% in business outcomes that matter to them

(SEE FIGURE 4).

Higher than 25% lift

10-25%

5-10%

1-5%

Not measurable

Much higher

Somewhat higher

As expected

Somewhat lower

Much lower

FIGURE 4

What level of improvement to business outcomes have you seen from applying data to marketing?

Is this lift higher or lower than your expectations?

n=22 n=22

9.1%9.1%

18.2%9.1%

31.8%27.3%

13.6%

72.7%

4.5%


Still, challenges exist. Despite the confidence with which marketers cite the need for — and value of — customer data, they are not always maximizing data’s impact. Nearly half the respondents believe they have only scratched the surface of what customer data means to their marketing efforts, and one-quarter believe they are seeing benefits limited to specific campaigns (SEE FIGURE 5). Insight-driven approaches and decisions that come from advanced analytics are implemented by less than 20% of the responding marketers.

FIGURE 5

What level of improvement to business outcomes have you seen from applying data to marketing?

45.5%

9.1%

27.3%

13.6%

4.5%

Barely scratched the surface

We are running data-driven campaigns that are showing results

We use advanced analytics to gain insight, then act using traditional methods

Reporting is pointing to lots of wins in the future

Data drives decisions and provides deep insight into outcomes

n=22

The key question is how people are using data to drive their business. It’s great that companies come in and talk about the potential of data, but in reality, no one knows what

to do with it. What is data doing to drive the business? Marketers still need to have a strategy rather than just mashing a lot of data together.

SVP Head of Brand Marketing, Fitness Brand


Ownership of Decisions, Data, and Tools is a Shared EffortOne of the challenges with the customer data effort is that it’s not always, or even typically, owned and managed by a single team. IT manages the tech and security, for example, while business intelligence often houses the company’s data scientists. Meanwhile, marketers, who claim the lion’s share of the business justification for incorporating data and analytics into the organization’s mix, often lack the needed skills to work with data they intend to use. In fact, only 8% of the marketers we surveyed have a data-ready marketing team (SEE FIGURE 6).

Data scientists and analytics team

Marketing campaign managers

The whole marketing team is data-ready

The head of marketing leads this charge

Our agencies help us analyze our how effectively we use customer data

No one is really on top of it yet

Other 16%

20%

8%8%8%

16%

24%

FIGURE 6

Who in your organization is best equipped to tie customer data to marketing success or marketing ROI?

Analytics

Finance

Partnership between marketing and data science teams

All levels get involved, including the agency

Marketing channel teams (search, display, email, etc) in partnership with analytics

No one fully equipped yet, but the goal is to share across brand, analytics, and agencies


As a further example of challenges around data education in marketing departments, one newly growing area — the Customer Data Platform or CDP, defined as a marketer-based management system that creates a persistent, unified customer database that is accessible to other systems — was unfamiliar to 48% of respondents. The technology challenge is not a small one and the number of platforms, tools, and vendors that need to be managed continues to grow (SEE FIGURE 7A).

Even so, with so much technology to digest, 64% of marketers say they still lead the discussion around the business and marketing needs they want data providers and platforms to satisfy (SEE FIGURE 7B). In other words, when it comes to defining the goals for what organizations purchase regarding data and data tools, marketing still leans on its own resources and instincts.

Conversely, when technology tools — often referring to technology apart from data analysis tools — are being tested and priced, IT remains in a leadership role, and they seek support from business intelligence. Business intelligence teams come into play by helping to determine deal parameters and set more detailed user requirements.

CRM

Email automation

Programmatic tools

Cookies

Personalization

Marketing automation

Marketing clouds

Demand-side platforms

Cross-device measurement

Data clouds

Identity management vendors

64%

72%

72%

64%

60%

56%

52%

40%

40%

28%

16%

FIGURE 7A

Which of the following technology tools do you use to manage and act on customer data (select all that apply)?

FIGURE 7B

Who leads the discussion of which data providers and platforms to use?

64%12%

24%

Marketing

IT

Other

n=25

Digital Center of Excellence –leads from Analytics, CRM and Data Architecture

Marketing and Engineering

Digital/advertising team in partnership with martech/analytics

All of the above


In 2016 the company restructured the marketing approach — including

leadership, tools, and investment decisions — to focus on data. In that process a lot of changes were made on the team. That gave us permission to ring-fence technology for marketing rather than having that be managed centrally. So, I get to work closely with my marketing tech peer on all data and technology decisions.

Beyond questions of which departments lead which purchases, IT’s role cannot be overstated when it comes to filling in the knowledge/skills gaps that marketers cited earlier in this report, and IT is particularly involved when it comes to solving problems with the data that marketers want to use. Across categories, IT is a key partner for well over half the marketers surveyed as they implement new tools to drive campaign success (SEE FIGURE 7C).

FIGURE 7C:

How would you rate the following technical challenges around customer data?

Analysis paralysis

Struggling to choose a vendor

Working with IT or another dept

Already mastered

Privacy protection/data matching 9.1% 4.5% 77.3% 9.1%

Reporting 0.0% 13.6% 72.7% 13.6%

Customer Identity Management 4.5% 18.2% 63.6% 13.6%

Advanced analytics 9.1% 18.2% 59.1% 13.6%

Segmentation 9.1% 13.6% 59.1% 18.2%

Test and learn 4.8% 14.3% 57.1% 23.8%

Data science for competitive advantage 23.8% 14.3% 52.4% 9.5%

VP Marketing, Full Price Retailer


Acting on Customer Data is an Uphill Climb, But the Payoff is Worth ItAs noted at the beginning of this report, marketers are confident that data is worth the investment. But it’s a hard row to hoe. When we asked marketers a range of questions about the perception versus the reality of putting customer data to work, they responded uniformly on some key points (SEE FIGURE 8A):

• Aligning customer data with corporate systems is more difficult than marketers assumed it would prove when they planned their strategy — 84% agree or strongly agree; 72% agree that difficulties related to legacy systems play a role.

• The push to support data implementation is unquestioned; there is evidence of buy-in at scale. Only 4% feel that utilizing customer data is more of a concept than a reality.

• Again, skills are critical to the success of data in the marketing effort: 40% agree that their marketing staff is not ready for a data-driven world and twice that percentage say that activating customer data for marketing is still a learning-curve for their team.

FIGURE 8A

Please indicate your level of agreement with the following statements as they relate to your use of customer data in marketing

Customer data integration and management is harder than we first thought.

Our company’s systems prevent me from fully acting on data for marketing purposes.

My staff is not equipped to be data-driven marketers.

No marketing decision gets made without customer data.

Activating marketing with customer data is an emerging skill set.

4% 12% 48% 36%

8% 20% 44% 28%

Strongly disagree Testing Neither agree nor disagree Agree Strongly agree

4% 24% 32% 32% 8%

12% 24% 36% 20% 8%

16% 4% 52% 28%


These answers reflect differing states of data maturity among the marketers responding. Only 24% have a fully developed effort in place, while the bulk of respondents (52%) have some core elements in place. And when asked to rate their success, 48% gave their status as “in progress” for the integration of data, while 64% rate themselves as “in progress” when it comes to activating customer data to drive results.

1 Just getting started

2 Plans are being developed

3 Some elements are in place

4 We’ve executed well, waiting for results to further assess

5 We are leaders in our market sector

1 Nascent

2 Planned

3 In progress

4 Excellent, but still a side project

5 Embedded in every discussion

FIGURE 8C

How would you rate your success at integrating customer data?

How would you rate your success at activating customer data?

4% 20% 52% 12% 12%

4% 12% 48% 12% 24%

4% 16% 64% 8% 8%

FIGURE 8B

How would you rate your maturity with customer data, i.e. how far along the journey to mastering customer data for marketing purposes?


True Personalization is Still a Challenge for Most MarketersPersonalization remains one of the top use cases for customer data, after customer acquisition and ahead of retargeting. Even today, however, marketers are conservative when it comes to using data and analysis to create truly personalized consumer experiences. Messages are customized in broad strokes instead, based on cohorts or wider segments by 78% of respondents. Half are using expressed behaviors to inform personalization, and a small percentage (14%) are using data to personalize, or contextualize, based on physical factors such as weather and location.

The biggest perceived area of risk seems to be related to content personalization. Marketers are fine with push email content (i.e. customized marketing efforts) but shy away from using a customer’s history with a brand to create more directed personalization outputs (SEE FIGURE 9).

My team and I have to go to a lot of people to get data. First-party data is managed by many divisions.

We go to Google Analytics to get website traffic data. Some social data comes from Salesforce Social Suite, but that’s doesn’t get us all we need, so we also use an outside party for insight. For CRM, we have to go to IT to get access.

EVP Franchise Management, Entertainment Company

Customer acquisition

Personalization

Retargeting to existing customers

Customer service enhancements

Understanding customer behavior

Customer retention

Other

n=23

26.1%

21.7%

17.4%

8.7%

8.7%

4.3%

13.0%

FIGURE 9A

Which of these reflect your best use cases for customer data?


Messages are customized by broad segmentation

Messages are customized to cohorts of 50 or more individuals

Every customer gets a unique message

Not applicable

n=23

Messages are customized based on behaviors

Messages are customized based on physical factors (location, gender)

Messages are not customized beyond name/greeting

All of the above

n=22

Yes, but just for push and email outputs

Yes, every piece of marketing is informed by customer-specific data

Yes, but only based on name, not customer history

Yes, but only for advertising placement

No

n=23

47.8%

30.4%

13.0%

8.7%

50%

13.6%

13.6%

22.7%

17.4%

52.2%13%

13%4.3%

FIGURE 9C

What inputs are used to personalize each message?

FIGURE 9B

If you apply customer data to personalization, at what level do you customize?

FIGURE 9D

Are you personalizing any content?


THERE WILL BE MANY VERSIONS OF THE DATA-DRIVEN FUTURE

Marketers Will Embrace Multiple OptionsMarketers will likely fall into one of at least two primary camps in the data-driven future:

1. The In-Crowd. Marketers who have the mandate to invest in data are seeing — and will continue to see — more successful campaign outcomes. They will have direct or team-driven input into data and technology decisions, allowing them to act on data and review the impact of decisions on a real-time basis. Retail companies, which typically have first-party customer data at their disposal, and direct-to-consumer brands (e.g., Stitch Fix) that have emerged in the last five years, are examples of leaders working with marketing in this respect. They are the “cool kids” of data-driven marketing.

2. The Drop-Outs.Companies that lag behind will more often be those that have historically relied on outside channels for customer input and on IT for technology decisions without a mandate to become more involved with customer data and analytics at their organization. These brands will inevitably know less about their customers than data-savvy competitors, lacking the tools, allocation, and mindset to make data acquisition and activation a priority.

I expect that the future will be about how we use data smarter, and about how we empower more

people with data. It would be great if there was a better data culture, not just a marketing culture. Data will be more present in terms of how marketers evaluate campaign strategy, run creative, create conversational experiences, and understand the customers’ problems before selling them things. We want data to become more integrated into the journey rather than just a way to track results.

VP Digital Marketing and Big Data Platforms, Credit Card Company


Consumers Have Different Data Boundaries Thinking about the diverse consumer audiences with which marketers engage, how will customers evolve as data’s influence continues to expand? Here’s a consideration of ways consumer types could develop and what the industry can potentially expect.

CONSUMER TYPE STANCE DEMOS

The Privacy Advocates Tech savvy, proactive consumers who actually read privacy statements and test boundaries

Tech savvy, 30-50 years old

Millennials: What’s In It For Me?

Will exchange data for something of value (coupons, free swag, etc)

The first digital natives to enter the workforce and have families

Blissfully Unaware Don’t realize they could be impacted by a sharing data

Older and/or less educated on technical operations

Non-sharers Only provide information to known recipients

Retain control of data, but either because they care a lot or just know there is nothing they can do

GenZ: You Don’t Know The Real Me

People (especially teens) create multiple accounts to reflect different relationships

Younger consumers are savvy about profiles and how to manage them


CONCLUSIONS

Given what we’ve learned about marketers, data, and the realities of data in the marketplace, what can we identify as next steps for organizations, for brands and advertisers and the marketing teams that support them? The following list highlights some key strategies for a data-rich future.

If faced with resistance to data investment, don’t be afraid to start small. The marketers that are leaders now learned early on that they need to prove the value of data-driven efforts. Small steps helped them prove the bigger case to management.

Partner with IT, wherever they are in the world. Building strong relationships with the central technology buyers — whether they are down the hall or on another continent — and being confident about add-ons to core platforms will help keep data innovation at the leading edge.

Educate yourself and your team. Now. Those with the aptitude to learn how to make data work for marketing should be given the opportunity to learn even more in the near term. For some companies, this will become a mandate as strategies shift from a legacy marketing to a data-led approach to the customer journey.

Prepare for the future: major platforms will be more regulated. Everyone interviewed for this report said that further regulations of data and privacy are coming. But the consensus is that the platforms — including media, CRM, and marketing clouds — will develop and evolve to leverage whatever consumer-facing advantages emerge from the next generation of data rules.

Voice and IoT interfaces will contribute to a more complete view of the customer. What’s next in data inputs? The customer journey is moving toward voice-enabled requests, IoT-based inputs, and new ways of understanding behavior from first- and third-party sources. Expect the next wave of data-smarts to include learning how to interpret passive inputs like activity monitoring, complementing active inputs like search.

About Ascendant NetworkAscendant Network runs two networks for marketing professionals; the Retail Ascendant and the Digital Ascendant; each is home to twice-yearly events and a selective community (invite-only via nominations) of senior change agents (VP, SVP, and C-level) spearheading today’s marketing evolution. Each gathering brings together 100 transformative marketers from the nation’s most progressive brands to share + connect + tackle industry problems. Our closed-door/no press forum is deliberate -- it supports candid sharing and relationship-building among the industry’s “who’s who”.

Ascendant Network also produces &THEN, a conference and trade with 4,000 attendees for the Data & Marketing Association and custom Ascendant Boot Camps for F500 enterprises.

About VerveVerve™ is a location-based mobile marketing platform that connects advertisers with consumers to deliver successful business outcomes. The company’s proprietary location intelligence, patented technology, premium mobile inventory, and analytics capabilities empower marketers to identify, reach, and engage consumers with compelling mobile advertising experiences. For more information, visit www.verve.com. Follow us on Twitter: https://twitter.com/vervemobile.

the realities of data and marketing: success, … · the realities of data and marketing 10 still,...

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